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House prices rise 4.2% year-on-year

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House prices rose 4.2 per cent year-on-year in August, according to the latest house price index from the Land Registry.

On a monthly basis prices were up 0.5 per cent to an average of £184,682.

Over the 12 months to August the areas with the highest levels of growth were the East, the South East and London, with prices up 8.4 per cent, 7.6 per cent and 6.6 per cent, respectively.

The areas with the weakest growth over the past 12 months were the North West, the North East and Wales at 0.2 per cent, 0.4 per cent 0.9 per cent, respectively.

Legal & General Mortgage Club director Jeremy Duncombe says: “The lack of supply is continuing to drive a wedge between house price inflation and earnings growth. As a result, homes are becoming increasingly unaffordable, putting them out of reach for many aspiring homeowners. The longer this continues, the larger the housebuilding deficit will become, making the housing crisis progressively more difficult to resolve.

“It’s crucial that the Government and the industry work together to remove any barriers that may be limiting construction. Housebuilders are faced with a shortage of skilled workers, materials to build with, and land to build on.

“It’s great to see that the Government has announced a target of 1 million new homes by the end of this parliament, but this is unlikely to come to fruition until these housebuilding constraints are addressed. Construction has been insufficient for a number of years, and we need a long-term solution to this problem, rather than just a short-term pledge.”

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